Technology Polarization

Koki Oikawa and Minoru Kitahara

No e113, Working Papers from Tokyo Center for Economic Research

Abstract: We construct a new method to describe firm distributions within technology fields and investigate the relationship between those distributions and aggregate innovation. To locate firms on a technology space, we apply multidimensional scaling for the inter-firm technological dissimilarity matrices that are computed from patent citation overlaps among firms using the NBER US patent dataset. Our estimated firm distributions show increasing trends in technological distance and polarization on average, where we follow Duclos, Esteban and Ray (2004) to measure polarization. We construct a model of inter-group competition in which polarization stimulates aggregate R&D. The model fits data before 1990 but the impact of polarization is reversed after that. We attribute the structural change to the major patent reform in the United States in 1980s.

Pages: 48 pages
Date: 2017-04
New Economics Papers: this item is included in nep-bec, nep-com, nep-cse, nep-eff, nep-ino, nep-sbm and nep-tid
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